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Real estate agents have an obligation to present all offers to the buyers, but often they will reject an offer without even submitting it to the buyer.
Make sure your offer gets submitted to the buyer by informing the real estate agent of their obligation (if they are tough) and I have found that it helps to ask for a counter offer from the seller if your offer is rejected. Half the time you don't get one, but this shows the real estate agent you are ready to negotiate and aren't just low-balling them.
I have often made counter offers straight away after receiving the news that my offer was rejected. As long as you stick to what you want to pay for the property and don't get talked into going higher you should be fine.
Whenever an offer is rejected I will always tell the real estate agent that I need to look at my finances before I submit another offer.
Ryan McLean | On Property
http://onproperty.com.au
Email MeLooks like you are on the right track. Having saved $5,000 is already a step in the right direction. If the banks will only lend you $144k then you have to start looking for something that you can buy for $144k. You almost have your 5% deposit saved so you could start looking at buying a property this year if you really wanted to.
$144k isn't a lot when it comes to investing in property. If you lived in Sydney you wouldn't be able to buy a one bedroom unit. But the fact that you live in Tasmania may prove as a plus for you.
Are there any good rural centres in Tasmania where you can get a good property within your price range? Are there any positive cash flow properties around where you live?
Maybe you should think about buying a place that you can add value to through renovation or street appeal. That way you can grow your $5000-$10000 deposit by creating equity.
Robert Kiyosaki always suggests that you should start small and make mistakes on your small deals (because you won't lose as much money) before you move on to bigger deals. So maybe you should just think about starting small??
Ryan McLean | On Property
http://onproperty.com.au
Email MePositively cash flow properties definately exist, and yes I have seen many properties that fit into Steve's 11 second rule. Though I haven't seen any of these properties in capital cities, only in rural areas. But not so rural that you could never get anyone to rent it.
It Australia it seems that most of the positive cash flow properties have to be made rather than bought. Because everyone has wised onto the fact that positive cash flow investing is awesome prices are pushed up, meaning there is less chance of positive cash flow.
Look into creating a positive cash flow property through renovations, creating dual occupancy, subdivision, rent out a granny flat separately etc. If you use your creativity you can definately achieve a positive cash flow result.
As for the market being high I believe you are right. Australia is one of the most expensive countries to own a home in. But as for the market about to crash, I don't agree. The desire for people to own their own home is still massive! And with the government giving you a tax write off for negative gearing this will keep the market going strong. Just my opinion.
Good luck in finding an awesome property to invest in.
Ryan McLean | On Property
http://onproperty.com.au
Email MeDefinitely ask your business accountant. But yes, in most cases you should be able to claim tax on the interest on your investment property…that is if you are earning less in rent than you are paying in outgoings.
I have heard that when it come to home offices you can only claim a portion of your rent. It depends on what percentage of room you use for business. I think they measure it per square footage. So if you have 40 square metres and you are using 10 square meters for work the you can claim 25% of your tax.
Why not stay living in your own place and get your friends to rent a room??? That would help you pay down your mortgage.
It might help you pay off your mortgage quicker if you are earning more in rent than you are paying in rent. Investing for the long term! You are a very clever man. Why only own one property when you can own two and have them both working for you???
Ps. None of the above is financial or taxation advice. Always talk to a registered professional
Ryan McLean | On Property
http://onproperty.com.au
Email Me@ Crusty – Give the kid a break…he is only 24.
Yes having a long term plan for your life would definitely make you someone with great vision. But for a 24 year old to even think about saving and investing in property is bizarre. He has more vision than 99% of people even though he is only looking towards the next 6 years.Ryan McLean | On Property
http://onproperty.com.au
Email MeThis is a great story about how you turned a negatively geared property that was eating you alive into a positively geared property. Even though you didn’t make a lot of money it is still a great achievement.
I was wondering, would you mind if I used your story on my blog? My readers have been asking for stories of people who turned bad deals into good deals by being creative.
Shoot me an email if you don’t mind me using your story
[email protected]Cheers
Ryan McLean | On Property
http://onproperty.com.au
Email MeYou have to think about what you want and what you can afford.
Firstly, if the company is paying all your fees that is a huge blessing!!! How often does an offer like that come around?
From what you have said it looks like you have about $40k in equity and $25 in savings. That is a total of $65k
If you can only borrow $450k then you might not be able to keep both. And you also have to ask yourself whether you can afford repayments on both properties?
Buying to invest and buying to live are two completely different things. You bought your first home to live in, but that doesn’t mean it is a good investment.
Have a think about selling and buying a new home and then maybe using any extra money left over to buy an investment property. Maybe a cheaper one that has a better cash flow situation??? Just an idea to think about. That way you may be able to get a home that is big enough for you and still have an investment???
Ryan McLean | On Property
http://onproperty.com.au
Email MeThe previous commenters are right. In Australia if you earn less than $30K most banks won’t even give you a credit card…let alone a home loan. Maybe it is different in Canada but I am guessing if you say that you can’t afford to pay your bills already then how are the banks going to see that you can afford a loan?
The banks want to know that you can afford a loan even if things go pear shaped.
Maybe you should get another job, or if you don’t want to do that then think about starting a business on the side to build up some money and some serviceability,
Good luck!!! I hope you can achieve you goal of retiring at 30.
Ryan McLean | On Property
http://onproperty.com.au
Email MeThe first question you have to ask is not whether or not you should build a house on it, the question is whether or not you can afford to do so. Houses can take a long time to build and you have to take the interest repayments into account. Can you afford them each month and can will the bank lend you the money to do so?
Then look at your block, if it has a big slope or is unusual in any way then you may not be able to use one of the standard houses like the ones they sell at Wisdom Homes or that sort of stock standard home.
Then you have to look at your area and whether it needs more homes, is there a demand for it and what kind of home is in the greatest demand?
There is no doubt that building a house and then selling it CAN make you more money than just selling a vacant block. But do you want to go through all that hassle? If you do then great!!! Otherwise maybe you should think about just selling the block and pocketing your profits.
Ryan McLean | On Property
http://onproperty.com.au
Email MeJust because someone is a mortgage broker doesn’t mean they are right for you. There are good and bad brokers just like there are good and bad teachers in school.
Make sure your broker understands what you are trying to achieve, because if you are trying to invest and they only deal with PPORs then they may want to structure things like you own a home rather than structure them so it is beneficial to your investment.
I have heard from a lot of people on this forum that Richard is very good and I wouldn’t hesitate to try him out. To me I would imagine that brokers in rural areas would know less than a broker who has clients all over the country and all over the world.
Good luck
Ryan McLean | On Property
http://onproperty.com.au
Email MeObviously there are ways to declare things inaccurately to the government in order to lower your tax, but that is called tax evasion and it is illegal. You should talk to your account about some LEGAL ways you can lower the tax you have to pay on your investment property.
For example, you can often claim depreciation on the house and the items inside the home (Eg. Light fittings etc.). If you do repairs on the home then you may be able to claim some of that against your taxable income. There are lots of ways you can go about lowering your tax. Speak to a qualified accountant about how to do this (as I am not an accountant don't take anything I or anyone else on this forum says as "law").
I have heard that you can rent your house to yourself if you have purchased the property through a discretionary trust, and you rent it to yourself at market rent through a real estate agent. This means however that you will have to pay the real estate agents commission fee. But again this is something to talk through with your accountant.
Hope that helps. But really in my experience, cutting corners and doing the dodgy will only get you in trouble and set you back in life. Better to pay tax than to avoid it and end up in jail.
Ryan McLean | On Property
http://onproperty.com.au
Email MeIt all depends where you build. If you are building in an area that has higher demand for housing than current supply then it could be a very good idea. If you build in an area that currently has too much housing for its population (eg. A declining rural town) then it may not be a good idea.
The general consensus that I have been hearing is that housing in Australia will stay pretty stagnant in 2011, going up just a little. But as always it is just a prediction and many people have different predictions.
Something to think about: Think about buying land and moving a house on to it. Something to look into as it can be cheaper than building from scratch.
Ryan McLean | On Property
http://onproperty.com.au
Email MeOften your 5 day cooling off period will turn into a 10 day cooling off period, this is normal so if it happens don't worry. Then the 10% will be paid but you will not have access to it until the settlement date. Unless you have included a specific clause in your contract.
If they reneg on the settlement then you should be able to keep their 10%Ryan McLean | On Property
http://onproperty.com.au
Email MeYes you will need to claim this money at the end of year tax return. As you are receiving income from the property you need to include that in your tax return. Your accountant will know the income you have to report and also ask you accountant about the deductions you can claim so hopefully you don't have to pay a lot of extra tax.
Ryan McLean | On Property
http://onproperty.com.au
Email MeYes I am also confused. Have you bought a property with your parents and you want to redraw equity to buy an investment property but they don't want to redraw equity?
Ryan McLean | On Property
http://onproperty.com.au
Email MeJust make sure you define the spaces/rooms so they appeal to the most people. Most people when buying a house lack imagination so you need to show them the best way a house can be set up.
I noticed one of the rooms had a desk and computer in it. If it is a tiny room then that is fine, but if it is big enough to be a bedroom then it might be better to display it as a bedroom.Rugs are a good idea, but make sure it is a neutral rug, not a fluro pink rug or anything.
Turn all the lights on and lamps on when you have an open house, makes the place look lighter.
Good luck selling your property.
Ryan McLean | On Property
http://onproperty.com.au
Email MeGood luck! I am glad you have come to a decision. I am sure you guys will be extremely happy.
Ryan McLean | On Property
http://onproperty.com.au
Email Me@ Anne – Do you manage the property yourself or do you have someone manage it for you?
How do you select people for the rooms? Do you have to take into account group dynamics?Ryan McLean | On Property
http://onproperty.com.au
Email MeI agree with JacM, it changes everything when you have kids. Before we had kids we moved a lot and we loved it. Now that I have kids I am less inclined to move.
What do you think you want to do? Do you want the security of your own home? Or do you want to go hard on the investing side of things?
Ryan McLean | On Property
http://onproperty.com.au
Email MeWere you simply absent for under 6 years, or did the property become an investment property and did you rent it out?
Ryan McLean | On Property
http://onproperty.com.au
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